June 1st, 2010 8:00 AM by Mike and Susie Berra
You finally found the home you want to buy. Now it is time to make an offer. How much do I offer?
*Make sure you have seen enough of the current similar home inventory for comparison purposes.
*There is no set amount or percentage to offer based on the listing price. The listing price could be too high, could be at market value, or priced below market for a quicker sale.
*The amount you offer should not be based on what the current owner paid for it. They may have overpaid when they bought it. They may have gotten a great deal on it or they may have inherited it.
*Don't throw a random number at the seller. If the house is listed for $100,000 and you think you can steal it for $80,000, make sure that it's not only worth $70,000.
*Days on the market can be something to consider. See how long the property has been on the market at it's current list price. Overpriced homes tend to stay on the market longer, but properly priced homes should experience shorter marketing periods.
*Don't rely on the opinion of a friend, or family member, an accountant, an attorney or a financial planner to tell you what to offer, unless they are experienced in the real estate business and are very familiar with the values in the area you are buying. You may respect their opinion, but they may know very little about local values.
*Although we are currently in a "buyers market", all sellers are not going to take major losses just because you want the ultimate deal. Seller's will tend to be more cooperative and will possibly negotiate more than in the past.
*Don't be afraid to "offend" a seller on an offer if you have data that supports the fact that the home is priced too high. This is strictly business.
*Motivation is a very important factor. Both your motivation and the seller's motivation. If you have a very short time frame to buy, have another home to sell, or absolutely fall in love with the home, you may have to be fairly generous on your offer. If you find out that the seller has some serious motivation to sell and wants a quick sale, you may be able to get a better price on the home.
After analyzing all the facts and considering the motivation factor, now is the time to put your price on paper. Recent comparable closed sales, with no abnormal conditions of the sale, are your best source of coming up with your offering price.
Please contact us with any questions or comments.